How Will Brands Value The Profit And Loss For gTLDs

How will companies work out if their new gTLD will be treated as a profit or loss? Writing on her blog, Jennifer Wolfe attempts to address this issue and outlines four areas companies will need to consider for their brand’s gTLD to determine this.

“For many brand gTLDs, the decision to apply was defensive in nature, and accordingly, not a lot of effort went into creating a P&L,” writes Wolfe. “Some companies were strategic enough to recognize this was a capital acquisition and treated the digital real estate as just that – a capital expense that can be amortized over its useful life, which is typically considered 15 years as an intangible asset.  Others may be able to place it in an IP Holding company and utilize certain tax credits for research and development. While some may have simply absorbed the cost in legal or spread the line item across departments as a budget item.”

The four basic use cases companies will need to consider, if they haven’t already, for their brands when creating a profit and loss are: “a digital marketing platform, data mining and analytics, disruptive business models and an internal platform for knowledge sharing.”

Wolfe notes that “each one could have a distinct P&L, but yet there will be economies of scale across these various use case in cost management. This is where the gTLD starts to have real value for the corporation. Those costs of operating the gTLD can be spread across numerous use cases.”

Wolfe concludes by saying that “the future of the gTLD may be evolving within your company, but a clear capitalization strategy and P&L approach could be important to your company’s investment in this new digital real estate. Before allocating to a marketing, IT or even Legal budget, consider how you build the business case and capitalize the asset for maximum economic impact.”

To read the post in full, including more detail on the four basic use cases, go to: